EURUSD has stalled its decline and has found strong support at 1.2500. Resistance stands at 1.2713. The pair has been consolidating between these two levels since the beginning of October.

The underlying trend is bearish, as the market is below the daily Ichimoku cloud and the tenkan-sen and kijun-sen lines are negatively aligned. RSI is in bearish territory below 50 and has moved out of oversold conditions, suggesting the sell-off has been overdone for now and some consolidation is expected in the near term. The falling 200-day moving average highlights the bearish bias.

A move lower would target 1.2458, which is the 78.6% Fibonacci retracement level of the upleg from 1.2040 (July 2012 low) to 1.3992 (May 2014 high).

A bounce to the upside from current levels would bring into focus the key 1.2800 level.